Conquer These 3 Nonprofit Money Hazards That Block Decision-Making

Quick! Name five professional activities that don’t concern money. Stumped? Yes, of course. From the obvious What does it cost? To the subtle: Did we achieve our objectives? And the in-between: Can we do this program? Professional activities concern money. If mission or customers are the heart of your organization, money is its blood.

Since money is essential, every nonprofit needs meaningful money conversations. This article shares three common hazards that block discussions. To avoid these hazards, your business needs to recognize them and practice skills to move beyond them. Start by discussing one hazard at your next meetings. Use the questions suggested to start.

Hazard One

Money talk fosters stoplight decision-making

• “We can never afford that.” (Red light)
• “How much does it cost?” (Red light, possibly turning green.)
• “You can get a great deal” (Greenlight)

Stoplight decision-making translates complex decisions into yes and no answers. Should we take this action? “No, we can’t afford it.” “Yes, we have the budget.” When you base decisions on cost alone, you miss out on creative solutions, alternatives, and unintended impacts. By considering facts beyond cost, you strengthen decision-making.

Challenge Questions

If you solved your money challenge, would you take this action? Refined your answer: What can you do with little or no money? To impact your future: What action have we avoided because we believed we lacked money?

Hazard Two

Money talk elicits emotions.

Brain scientists tell us that as emotions increase, thinking decreases. The study of “neuroeconomics,” or the connection between money and the brain, is a fast-growing interdisciplinary field. Research from Carnegie Mellon found, “Under the influence of powerful emotions or drives, people often end up doing the opposite of what they think is in their best interest, even at the moment of acting.” In groups, this means that when money is discussed, the group runs the danger of deciding exactly the opposite of what it would if it were thinking. Remember groups who made “penny wise and pound foolish” decisions?

Exploration Questions

1. What emotions do you experience when you consider asking for money for our mission? What emotions do you experience when someone gives us money?
2. What actions can you take to help you slow down and think when money conversations elicit these intense emotions?

Hazard Three

Money talk gives the impression of being specific, but it’s not

Money talk is often vague. One person who “needs money” is like Old Mother Hubbard. Not only is every cupboard empty, the checking account is zilch, and the cards maxed. Another person who “needs money” is short of pocket change and heading to ATM to withdraw one hundred dollars.

Thought questions

1. Write down the figure you think a person means when they exclaim, ‘that’s a lot of money.’ Discuss.
2. In what ways does money vagueness (i.e., the true cost of your activities, about salaries, fundraising, or administration costs) protect your mission? In what ways does it harm your mission?
   • Can you think of an example of when one of these or another money hazards impacted this organization? What was the impact?
   • What specific and measurable actions can you take to improve decisions that involve money?

Additional Questions for All The Hazards

The quality of your money talk is important. It impacts your ability to make decisions about your mission. When you recognize these three common money hazards, you open the door to better decisions that make more mission for your organization.

For more answers, check out the Karen Nonprofit CEO Library.

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